Two women confronted the ruins that had been their neighborhood in Rikuzentakata, Japan, as they returned to try to retrieve their belongings on Tuesday.
TOKYO — After workers switched on the first set of control room lights at Japan’s crippled power plant in Fukushima last week, the Japanese government offered its strongest assurances yet that its nuclear crisis was close to being under control.
Heroic workers and firefighters continued to cool the volatile reactors by pumping in hundreds of tons of water a day. Much-awaited electricity had reached the plant after a rush to extend new power lines, ready to hook up to vital cooling systems and guide the plant to a long-term “cold shutdown.”
But less than a week later, a deluge of contaminated water, plutonium traces in the soil and an increasingly hazardous environment for workers at the plant have forced government officials to confront the reality that the emergency measures they have taken to keep nuclear fuel cool are producing increasingly dangerous side effects. And the prospect of restoring automatic cooling systems anytime soon is fading.
The recent flow of bad news from the Fukushima Daiichi Nuclear Power Station has undermined the drumbeat of optimistic statements by government and company officials who have at times tried to reassure a nervous public that significant progress is at hand — only to come up short.
“The earthquake, tsunami and the ensuing nuclear accident may be Japan’s largest-ever crisis,” the Japanese prime minister, Naoto Kan, told Parliament on Tuesday, in his most sober message to date on the nuclear crisis. “We find ourselves in a situation where we can’t let down our guard. We will continue to handle it in a state of maximum alert.”
An Address to the International UFO Congress, Fort McDowell Resort, Scottsdale, Arizona, Saturday, February 26, 2011by Hon. Paul Hellyer, P.C. Former Canadian Minister of National Defence
The world financial system is a total fraud. It is one gargantuan Ponzi scheme, no better than the one Bernie Madoff used to swindle his friends and neighbors, and thousands of times worse if you add up the total number of victims it has ripped off over countless generations.
The principal difference between the two schemes is that Madoff was acting outside the law while the international banking cartel has persuaded generation after generation of monarchs, presidents and prime ministers to provide legislative protection for their larceny.
The banks Ponzi scheme is alarmingly simple. They lend the same money to several people or institutions at the same time and collect interest on it from each. What the banks really lend, however, is their credit, and what they take back in compensation for that privilege is a debt that must be repaid with interest.
The number of times they lend the same money is called leverage. The practice is as old as the hills but for our purposes we can start with the goldsmiths of Lombard Street in London, England, who accepted deposits for which they issued certificates redeemable on demand. They paid their depositors a nominal interest rate on the understanding that they could lend the money to their customers at higher interest rates. They soon found that they could lend more than they had in their vaults because only a few depositors came in to redeem their gold or silver at any one time. It was a scam. It was illegal. Nevertheless they got away with it for a long while and the scam was legitimized when the Bank of England was chartered to help King William finance his war. Rich people subscribed £1,200,000 in gold and silver, as capital, to found the bank, which then was lent to the government at 8 percent. To show his appreciation the King allowed the bank to print £1,200,000 in banknotes and lend them at high interest rates. In effect, the bank was allowed to lend the same money twice – once to the government and once to the people.
Over the years, due to the avarice of the banks and the complicity of the politicians, that ratio has increased dramatically. In the early days of the 20th century, federal chartered U.S. banks were required to keep gold reserves of 25 percent. That means they were allowed to lend the same money four times. I remember when Canadian banks were required to maintain a cash reserve of 8 percent. That means they were allowed to lend the same money 12½ times.
Today, thanks to Milton Friedman’s irrational flip-flop from being a proponent of 100% cash reserves to the opposite extreme of zero reserves, and the adoption of his ideas by the major central banks of the world in 1974, multiples have increased dramatically – in some cases to as much as 20 to 1 or more. Banks only keep enough cash to meet day-to-day demands for those few customers who go in and request it, and consequently the fraud is virtually total.
The system works this way. Suppose that you want to borrow $35,000 to buy a new car. You visit your friendly banker and ask for a loan. He or she will ask you for collateral – some stocks, bonds, a second mortgage on your house or cottage or, if you are unable to supply any of these, the co-signature of a well-to-do friend or relative. When the collateral requirement is satisfied you will be asked to sign a note for the principal amount with an agreed rate of interest.
When the paperwork is complete, and the note signed, your banker will make an entry on the bank’s computer and, presto, a $35,000 credit will appear in your account which you can use to buy your car. The important point is that seconds earlier that money did not exist. It was created out of thin air – so to speak.
The banking equation is a species of double-entry bookkeeping where your note becomes an asset on the bank’s books, and the new money that was deposited to your account is a liability. The profit for the bank comes from the difference between the low rate of interest, if any, you would be paid on your deposit if you didn’t spend the borrowed money immediately, and the much higher rate you would be obliged to pay on your note – the technical term is “the spread.”
There are no losers and only winners from a plan to unify the three UAE stock markets with Abu Dhabi simultaneously buying Dubai’s 20 per cent stake in the London Stock Exchange for $1.5 billion.
The deal reported yesterday in The Sunday Times, without revealing its source, would follow an important move to sort out the debts of Borse Dubai that closed at the end of last week. The company that controls Dubai’s two stock exchanges sold some of its shares in the Nasdaq OMX Group to raise $673 million towards repaying a $2.45 billion loan.
Nov. 12 (Bloomberg) — China’s central bank may raise interest rates within weeks after inflation accelerated to the fastest pace in 25 months in October, a Bloomberg News survey of economists showed.
The benchmark one-year lending rate will rise to 5.81 percent by year-end from 5.56 percent, according to the median forecast of 11 analysts polled after yesterday’s price data. The deposit rate may climb to 2.75 percent from 2.5 percent, the survey showed.
China’s benchmark Shanghai Composite Index slid 2.6 percent as of the 1:01 p.m. local time break in trading on speculation that officials could move as early as today or this weekend after increasing banks’ reserve requirements on Nov. 10. Higher rates could complicate government efforts to limit gains in consumer and property prices by luring more money to the fastest-growing major economy.
The political class and Standard-Issue Punditry (SIP) don’t “get it”: Americans have completely lost faith in their Financial Elites and government, for abundantly obvious reasons.
Anyone who believes the foreclosure crisis can be contained is deluded, because the real issue in play is the citizens’ trust in their government’s ability to govern the nation’s Financial Elites according to the rule of law. Clearly, our government has failed its citizens–utterly, completely, totally, at every level of governance (Federal, State, local) and at every level of oversight and regulation.
The bitter truth is that the nation’s Financial Power Elites are not constrained by rule of law, and as a result of this revelation Americans’ trust in their government and political class has been shattered. Despite raising their voices 600 to 1 against the TARPand related bailouts of the nation’s Financial Power Elites (who stripmined the nation’s wealth from their investment banking and mortgage banking fortresses) in 2008, the government shoved trillions of dollars of bailouts and guarantees into private hands with pathetically little control in return.In their rage at this abject, cowardly surrender of their government to the Financial Elites, the American people tossed the craven bankers-lapdogs Republicans out and replaced them with an untested young president who talked the talk and old-line Democrats.
All of whom proceeded to attach the same leash to their necks and become craven lapdogs of the Financial Elites. Less than two years after the inevitable meltdown of the Power Elites’ stripmining operation and its unprecedented rescue by the Federal government, the Financial Power Elites are once again caught flouting the laws of land as if the U.S. were a “banana republic” in which laws are “only for the little people.”
And now the inevitable calls are arising for a “Federal solution” which will bail the bankers out of the foreclosure crisis with their ownership of the political class and the nation’s wealth firmly in hand.
The people have lost their trust in their government for good reason: it has betrayed their trust.
The European Central Bank (ECB) says self-regulation on Sepa has not achieved the expected results and is calling on legislators to now set a mandatory migration timeline.
Full story: http://www.finextra.com/news/fullstory.aspx?newsitemid=21923 EUROPEAN BANKS NEED BETTER INTEGRATED RISK MANAGEMENT – SURVEY
European financial services firms are not placing enough emphasis on risk management when it comes to decision-making and performance, while IT systems are struggling to cope with increased regulatory demand, according to research commissioned by Oracle.
Full story: http://www.finextra.com/news/fullstory.aspx?newsitemid=21926
CORPORATES WILLING TO PAY MORE FOR BETTER SERVICE FROM BANKS – SURVEY Over two thirds – 68% – of corporates would consider switching banks for better
customer service around on-boarding, account maintenance and query handling,
a 24% rise on the previous year, according to a survey from Finextra Research and Pegasystems.
Full story:http://www.finextra.com/news/fullstory.aspx?newsitemid=21925
SGX IN ASX TAKEOVER TALKS – REPORT The Singapore Exchange (SGX) is set to make a takeover offer for the Australian Securities Exchange (ASX), according to local press reports.
Full story:http://www.finextra.com/news/fullstory.aspx?newsitemid=21924
No, there will be no double dip. It will be a lot worse. The world economy will soon go into an accelerated and precipitous decline which will make the 2007 to early 2009 downturn seem like a walk in the park. The world financial system has temporarily been on life support by trillions of printed dollars that governments call money. But the effect of this massive money printing is ephemeral since it is not possible to save a world economy built on worthless paper by creating more of the same. Nevertheless, governments will continue to print since this is the only remedy they know. Therefore, we are soon likely to enter a phase of money printing of a magnitude that the world has never experienced. But this will not save the Western World which is likely to go in to a decline lasting at least 20 years but most probably a lot longer.
The End of an Era
The hyperinflationary depression that many western countries, including the US and the UK, will experience is likely to mark the end of an era that has lasted over 200 years since the industrial revolution. A major part of the growth in the last 100 years and especially in the last 40 years has been built on an unsustainable build-up of debt levels. These debt levels will continue to swell for another few years until the coming hyperinflation in the West leads to a destruction of real asset values and a debt implosion.
In the last 100 years the Western world has experienced a historically unprecedented growth in production, in inventions and technical developments leading to a major increase in the standard of living. During the same period government debt, as well as private debt have grown exponentially leading to a major increase in inflation compared to previous centuries.
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Until the early 1970s the growth in credit to GDP had been going up gradually since the creation of the Fed in 1913.. But from 1971 when Nixon abolished gold backing of the dollar, virtually all of the growth in the Western world has come from the massive increase in credit rather than from real growth of the economy. The US consumer price index was stable for 200 years until the early 1900s. From 1971 to 2010 CPI went up by almost 500%. The reason for this is uncontrolled credit creation and money printing. Total US debt went from $9 trillion in 1971 to $59 trillion today and this excludes unfunded liabilities of anywhere from $70 to $110 trillion. US nominal GDP went from $1.1 trillion to $14.5 trillion between 1971 and 2010. So it has taken an increase in borrowings of $50 trillion to produce an increase in annual GDP of $13 trillion over a 40 year period. Without this massive increase in debt, the US would probably have had negative growth for most of the last 39 years.
Total US debt to GDP is now 380% and is likely to escalate substantially.
Outside the Preobrazhenskoye cemetery in eastern Moscow, Muscovites hawking books and trinkets are still in shock from the scorching heat and choking smog that filled the Russian capital and made it hell on earth for nearly a week.
“People couldn’t breathe,” said one. “The authorities did nothing,” said Nadezhda, a pensioner selling flowers.
Inside the cemetery gates, gravediggers are taking respite from a surge in funerals that first grew as temperatures reached record levels and then climbed, as toxic smog from forest and peat bog fires shrouded the city. Death rates doubled in recent days, according to a senior Moscow health official, as the elderly and those suffering from bronchial and heart problems were hit.
MORE IMPORTANT:
A ban on Russian grain exports ordered by Prime Minister Vladimir Putin came into force on Sunday, with the government battling to keep down prices of basic foodstuffs amid a record drought.
According to a government decree signed by Putin on August 5, the ban will extend from August 15 up until December 31, although the powerful premier has indicated it may even extend beyond that date if the harvest is bad.
Russia, the world’s number three wheat exporter last year, has already warned that its grain harvest this year will be just 60-65 million tonnes, compared to 97 million tonnes in 2009.
The drought amid the worst ever heatwave in Russia’s history has ruined one quarter of the country’s crops, according to President Dmitry Medvedev.
The export ban is aimed at keeping the Russian domestic market well supplied with grain to prevent sharp rises in prices. Russia’s leaders, acutely nervous of social unrest, will be keen to avoid any discontent over food prices.
FT Alphaville missed this IMF paper when it first came out in April, 2010.
Authored by Reza Moghadam, director of the IMF’s strategy, policy and review department, it discusses how the IMF sees the International Monetary System evolving after the financial crisis.
We’ll cut to the chase and draw readers’ attention to the final bubble in the following chart, found on page 4:
Which means, in the eyes of the IMF at least, the best way to ensure the stability of the international monetary system (post crisis) is actually by launching a global currency.
And that, the IMF says, is largely because sovereigns — as they stand — cannot be trusted to redistribute surplus reserves, or battle their deficits, themselves.
The ongoing buildup of such imbalances, meanwhile, only makes the system increasingly vulnerable to shocks. It’s also a process that’s ultimately unsustainable for all, says the IMF.
Or as they put it:
The global crisis of 2008/09, for all its costs, has not jeopardized international monetary stability, and the IMS is not on the verge of collapse. That said, the current system has serious imperfections that feed and facilitate policies—of reserves accumulation and reserves creation—that are ultimately unsustainable and, until they are reversed, expose the system to risks and shocks that a reformed system could minimize.
All in all, the IMF believes there has simply been too much reserve hoarding going on:
Reserve accumulation has accelerated dramatically in the past decade, particularly since the 2003-4. At the end of 2009, reserves had risen to 13 percent of global GDP, doubling from their 2000 level, and over 50 percent of total imports of goods and services. Emerging market holdings rose to 32 percent of their GDP (26 percent excluding China). Twenty-seven of the top 40 reserve holders, accounting for over 90 percent of total reserve holdings, recorded doubledigit average growth in reserves over 1999-2008.
Holdings have also become increasingly concentrated, with over half the total held by only five countries. These numbers exclude substantial foreign assets of the official sector not recorded as reserves, including in sovereign wealth funds (SWFs), and yet invested in liquid, dollar denominated financial instruments, that have grown even more in recent years.1
Of course, in the first instance, the solution probably lies in closer collaboration between sovereigns, most likely via the more active use of such things as special drawing rights, says the IMF.
But in the end, a global currency makes the most sense, the paper concludes — especially since the SDR is currently just an accounting tool that draws on the freely usable currencies of member states , not an actual currency itself.
Damir Sagolj/Reuters
